The Central Bank (BC) simplified the rules of mandatory deposits and, with this, released in the market R$ 2.7 billion. The changes will take effect at the end of the year. Mandatory is the portion of deposits that banks are required to hold in the Central Bank (CB) account and represents one of the tools the monetary authority has to regulate the amount of money in circulation in the economy.

In a statement, the bank said it made adjustments to reserve requirements on cash deposits (cash available for customer withdrawal at any time) and on time deposits (when the money stands at the bank, yielding for a certain period).

“The changes are within the scope of the CB + Cheapest Credit pillar [made up of measures to make credit cheaper, increase financial education, modernize legislation and make the financial system more efficient] and are part of the work to
simplify rules of the compulsory collection, allowing a reduction of costs for the financial system, “says the CB.

According to the CB, two circulars were published, consolidating previously scattered rules in 17 documents. Deductions were made in December 2018 for the mandatory deductions that would end at the end of 2019.

In order to compensate for changes in deductions, the rate on time deposits was reduced from 34% to 33% and on-demand resources from 25% to 21%, generating a residual release of 0.6% of total collection (R$ 435.906 billion).

In addition, the CB adds, the values of some deductions such as those based on level I of the Reference Equity of the financial institutions in the deposits on term resources and as those that focus on the average values of the mandatory collection on-demand resources ( increases from R$ 200 million to R$ 500 million).

According to the CB, the changes in the reserve requirements on demand and on time deposits mean that eight smaller institutions are no longer obliged to make such payments.

Still, according to the Central Bank, the minimum daily requirement of compliance with the requirement of 80% to 65% on the demandable amounts on-demand resources is also reduced, allowing banks greater flexibility and ensuring better conditions for the functioning of the money market.